How to Pay for Elder Care

One of the biggest challenges facing seniors and their families today is how to pay for Elder Care, especially the various forms of Elder Care. Elder Care or Senior Care can come in many different forms. There is Private Duty Homecare and Skilled Home Health Care. There is Independent Living, Assisted Living and Continuing Care Retirement Communities. There are Memory Care Facilities, Nursing Homes and Hospice Care. All forms of care accept private pay funding which means payment comes from sources other than Medicare or Medicaid. Private Pay allows the recipient of care to choose the form and setting that they prefer. Private Pay can be funded by savings and investments, long term care insurance or annuities, social security or other retirement benefits, Veterans’ benefits, and through the conversion of a life insurance policy into a Life Care Benefit Plan (or Long Term Care Benefit Plan). In fact, numerous states in 2013 introduced laws to encourage owners of life insurance policies to convert their policies to remain Private Pay instead of abandoning them to go onto Medicaid. Another How to Pay for Elder Care option is public sources such as Medicare and Medicaid. Medicare will cover the first 100 days of in-patient nursing home based skilled rehabilitation services. After the 100 day period is over, expensive daily co-pays kick in or a patient would need to switch to Medicaid. To qualify for Medicaid, the patient would need to meet both medical necessity and financial eligibility requirements to qualify. A Medicaid recipient must be at poverty level financial levels and middle class Americans will “spend-down” their assets to get rid of things like their home(s), vehicle(s), and financial instruments such as life insurance policies to qualify. Once a person has made themselves a ward of the state, the most typical setting to receive Medicaid funded care would be in a nursing home and the patient would live in a shared room not of their choosing.

Paying for Elder Care

Medicaid is a program intended to fund healthcare services for the poor. The vast majority of seniors looking to pay for Elder Care would prefer to not be on Medicaid and moved into a nursing home. If they are able to use private pay funds they are then able to remain at home longer and choose the form of care they want. Programs such as the Life Care Benefit to create a Long Term Care Benefit Plan are considered a private pay funding option which is recognized as a Medicaid qualified spend down so that at some point in the future if the patient’s benefit is depleted they can then seamlessly transition over to Medicaid as a last resort.